Carson Inv. Co. v. Anaconda Copper Mining Co.

• Citation: 26 F.2d 651
• Decision Date: 28 May 1928
• Docket Number: No. 5228.,5228.
• Parties: CARSON INV. CO. et al. v. ANACONDA COPPER MINING CO.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

26 F.2d 651 (1928)

CARSON INV. CO. et al. v. ANACONDA COPPER MINING CO.

No. 5228.

Circuit Court of Appeals, Ninth Circuit.

February 27, 1928.

On the Merits May 28, 1928.

COPYRIGHT MATERIAL OMITTED

John H. Miller, Charles S. Wheeler, Jr., and A. W. Boyken, all of San Francisco, Cal., John M. Zane, of Chicago, Ill., and L. P. Sanders, of Butte, Mont., for appellants.

L. O. Evans and D. Gay Stivers, both of Butte, Mont., W. Clyde Jones, Arthur B. Seibold, Arthur A. Olson and Thorley von Holst, all of Chicago, Ill., and D. Anthony Usina, of New York City, for appellee.

Before HUNT, RUDKIN, and DIETRICH, Circuit Judges.

HUNT, Circuit Judge.

The Carson Investment Company and Miller, as trustee, appeal from a decree dismissing their complaint against the defendant appellee, Anaconda Copper Mining Company, for infringement of patents No. 1,149,495 (August 10, 1915) and No. 1,302,307 (April 29, 1919), both relating to reverberatory furnaces for smelting copper and other ores, issued to George C. Carson. Carson Investment Co. v. Anaconda Copper Co. (D. C.) 17 F.(2d) 815.

History of the patents will be found in the opinion in Carson v. American Smelting & Refining Co. (C. C. A.) 4 F.(2d) 463, wherein, on appeal from the decree of the United States District Court for Washington (293 F. 771), we held that the two patents were valid, that they had been infringed, that injunction should issue, and that accounting should be had. The decree of this court reversed the decree of the District Court, and remanded, with directions to enter a decree in accord with the views expressed in our opinion.

In due course the case went back to the District Court for Washington, and in accordance with the mandate of this court a decree was entered, sustaining the patents adjudged infringed, awarding perpetual injunction, ordering an accounting of damages and profits, and referring the case to a master to take the accounting.

In the present or Montana case the Carson Company, by a supplemental complaint, alleged the pendency of the above-mentioned case against the American Smelting & Refining Company and the decision and decree of the Circuit Court of Appeals therein; averred that the machines and processes used by the Anaconda Mining Company and alleged in the original bill of complaint to be infringements upon the patents in suit are substantially identical with the machines and processes used by the American Smelting & Refining Company, which were adjudged by the Circuit Court of Appeals to be infringements upon the patents in suit. It was further alleged that the patents involved and the issues raised in the suit of Carson v. American Smelting & Refining Co., supra, are the same as the patents involved and the issues raised in the present suit against the Anaconda Company; that, immediately upon the commencement of the suit of Carson v. American Smelting & Refining Co. in the District Court for Washington, the Anaconda Company, appellee herein, joined and cooperated with the American Smelting & Refining Company in the defense of that suit by employing and paying counsel to conduct, and who did conduct, the defense thereof, by hunting up evidence and witnesses who testified in the case, by carrying on all the activities and exercising all the rights of a defendant, and by conducting the defense in conjunction and in co-operation with the American Company, to the same extent as they would have been entitled to do if the Anaconda Copper Mining Company had been named as a formal defendant therein, and had been charged in the complaint with infringement of the patent in suit; that the Anaconda Copper Mining Company continued to act cojointly and to co-operate with the American Smelting & Refining Company in the defense of said suit during all its stages and proceedings in the District Court of the United States for Washington, and in the matter of the appeal heretofore referred to in the United States Circuit Court of Appeals for the Ninth Circuit; that all of the aforesaid acts and doings of the Anaconda Copper Mining Company in respect to the defense of the suit of Carson against the American Smelting & Refining Company, both in the District Court for Washington and in the United States Circuit Court of Appeals for the Ninth Circuit, were had, taken, and done by the Anaconda Company openly and publicly, and to the knowledge at all times of the said Carson, whereby the Anaconda Copper Mining Company became a privy to and with the American Smelting & Refining Company, defendant in that suit, and bound by all the proceedings, orders, opinions, and decrees rendered therein, as fully and completely as if the Anaconda Company had been named as a defendant.

Defendant, answering, admitted that the patents were the same, and that the Anaconda Company had contributed money to the defense in the case in the District Court, but denied the other allegations.

When the present case was brought to trial, plaintiffs called as a witness Mr. Usina, who had participated in the examination of witnesses in the American Smelting & Refining Case and was an attorney of record for the defendant in the instant case. After a few preliminary questions, the court asked what was the object of the examination. Counsel for plaintiffs stated that it was to elicit facts showing privity by virtue of the agreement between the American Smelting & Refining Company and the Anaconda Copper Company as to a joint defense of the American Smelting & Refining Co. Case. Upon objection by defendant, the court ruled that the decree in the American Smelting & Refining Co. Case was merely interlocutory, was subject to change on appeal from the accounting, and therefore was not res adjudicata as against the American Smelting & Refining Company, or any one else. The witness was then directed to leave the stand, and counsel for the plaintiffs were not permitted to question him further. The court also rejected plaintiffs' offer of a certified copy of the decree in the American Smelting & Refining Co. Case, which decree the District Court in Washington had entered pursuant to the mandate of the Circuit Court of Appeals. The trial was then proceeded with, and, after much evidence was heard, the patents were held to be invalid upon the grounds that they had been anticipated, that there had been prior use, and that certain alleged false and fraudulent misrepresentations had been made by Carson to the officials of the Patent Office during the pendency of his application for patent.

A clearer understanding is had by mention of these additional facts: The suit of Carson v. American Smelting & Refining Co., supra, was instituted in the District Court in Washington in November, 1921. The Circuit Court of Appeals in February, 1925, made the order and decree above outlined. Carson v. A. S. & R. Co., 4 F.(2d) 463. Petition for rehearing was denied, and writ of certiorari was denied by the Supreme Court. A. S. & R. Co. v. Carson, 269 U. S. 555, 46 S. Ct. 18, 70 L. Ed. 409. The American Smelting & Refining Company then moved the Circuit Court of Appeals for permission to be granted to the District Court to consider a motion to reopen the case for the purpose of allowing the introduction of certain newly discovered evidence, especially pertaining to alleged prior use at Dollar Bay, Mich. Many affidavits filed in support of the application to reopen set forth that the newly discovered evidence was not known until after the decision of the court on the merits in February, 1925. This court held that the evidence outlined in the affidavits was not sufficient to operate as an anticipation, and on March 1, 1926, denied the application to reopen. Carson v. A. S. & R. Co. (C. C. A.) 11 F.(2d) 766. The American Smelting & Refining Company also applied to this court to abate the suit, on the grounds that Carson was not a proper party to maintain it, inasmuch as he had assigned the legal title to the patents to his attorney, John H. Miller, as a trustee. That motion was denied. Carson v. A. S. & R. Co. (C. C. A.) 11 F.(2d) 764.

To review our decision in that matter, the American Smelting & Refining Company applied to the Supreme Court for a writ of certiorari, but the application was denied on October 11, 1926. A. S. & R. Co. v. Carson, 273 U. S. 695, 47 S. Ct. 92, 71 L. Ed. 844. Thereafter, when the mandate from the Circuit Court of Appeals went down to the District Court in Washington, there was a hearing as to the alleged defect in parties, and John H. Miller as trustee, and the Carson Investment Company, a corporation, were joined as coplaintiffs with Carson. The interlocutory decree hereinabove referred to was then entered, and the accounting is still pending.

Under the facts stated, at once the question arises whether the decision and decree of this court in the American Smelting & Refining Co. Case as to the validity and construction of the patents is res adjudicata, not alone as to the defendants of record to that suit, but is an estoppel as to those in privity with the defendant therein.

It is very clear that the decree of this court in the American Smelting & Refining Case in its essence and substance was final as to the validity of the patents involved, and as to the fact that there had been infringement. The questions of novelty and infringement were the pivotal ones before the court. They were considered and conclusively disposed of by our decree; hence they were finally settled.

It was not in the power of the District Court to open them, unless after permission granted by the Circuit Court of Appeals. The Supreme Court, in Re Potts, 166 U. S. 263, 17 S. Ct. 520, 41 L. Ed. 994, referring to the duty of the lower court in a case where a patent was held valid and infringed and that the infringer must account, said that the lower court could not vary or examine the decree of the Supreme Court for any other purpose than execution, or give any other or further relief, or review it even for...